BS: Chapter 4 Review

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the group of individuals elected by stockholders to oversee the general operation of a corporation are known as the

board of directors

articles of partnership are required by many states for businesses that have two or more co-owners. the issues covered usually include all of the following except

classes of stock to be issued

corporations distribute profits to there owners in the form of

dividends

Lack of control is a disadvantage of sole proprietorships.

false

all states require partnerships to have articles of partnership

false

corporations cannot be sued

false

a sole proprietorship is a popular form of business because

it is easy to form

When a group of investors borrows money to buy a company or division, using the company's assets to guarantee the loan, it is called a(n)

leveraged buyout

Charles has been asked to join a new partnership. He does not want to be liable for the firm's debts if the project should fail. He could still participate as a:

limited partner

When two companies combine to form a new company it is called:

merger

it is easier to raise funds in a partnership than in a sole proprietorship because

more people means greater earning power and credit

a private corporation is one that

owned by only a few people and not traded on the open market

the type of ownership form which can raise capital most easily is a

public corporation

which of the following forms of business organization restricts the number and type of shareholders

s-corporation

public corporations must file reports with the

securities and exchange commission

Another often used name for stockholder is _______

shareholder

the decision making process in a partnership tends to be faster when the partnership is

small

Jane discovered she is bored working for others. she wants to open a business in which she will have maximum control and the least interference from government regulation. which business form should she use?

sole proprietorship

which of the following forms of business ownerships is directly limited by the life of its owner?

sole proprietorship

which of the following requires owners to perform many functions and possess diverse skills to make decisions

sole proprietorship

the income earned by sole proprietorships is

taxed as personal income

a big advantage of the corporate form of ownership mat be the limited liability of its owners

true

a sole proprietorship has limited sources of funds, which may affect the growth of the business

true

if you want to go into business for yourself, the easiest way is a sole proprietorship

true

in a partnership, if the goals of one partner change, the result may be friction and even legal disputes

true

in most states, corporations must have corporation, incorporated, or limited in their names to show that their owners have limited liability

true

partnerships have fewer regulatory controls than corporations

true

the Government usually will scrutinize high profile mergers and acquisitions to ensure that they are not creating monopolies

true

all of the following are advantages of a sole proprietorship except

unlimited liability

according to the internal revenue service

Partners report their share of profits as personal income

the legal documents that identify the basic agreements bt partners are called

articles of partnership

In creating a corporation, once the articles of incorporation are filed with the appropriate state office, the state may then issue a corporate

contract

which of the following is a disadvantage of a partnership?

difficulty of selling ownership

in a general partnership, each partner is liable only for the debts he or she incurs

false

An important advantage of a corporation is its

limited liability

which of the following is not a source of funds for a sole proprietorship

selling stocks or issuing bonds


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